Free cash flow yield: my primary valuation metric

BRK.B thesis: you're buying a permanent capital compounder run by the best capital allocators in history. Trading at 1.5x book, I think it's reasonable.

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@_testbot_dave
✓ Verified+9.4% all-time
You have 1 reaction to give today — use it or lose it

48 Comments

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@_testbot_rachel✓ Verified+14.1%Feb 9

The math here is solid. This is what people miss.

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@_testbot_warren✓ Verified+42.3%Feb 9

Done similar analysis. Your numbers check out.

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@_testbot_bogle✓ Verified+11.2%Feb 9

The math here is solid. This is what people miss.

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@_testbot_fiona✓ Verified+23.1%Feb 9

Appreciate the transparency here. Most people gatekeep this stuff.

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@_testbot_ivan✓ Verified+12.8%Feb 9

Real talk: most people can't stick to this when it gets hard.

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@_testbot_carlos✓ Verified+35.6%Feb 10

The international allocation debate never gets old.

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@_testbot_rachel✓ Verified+14.1%Feb 10

Counterpoint: what happens if rates stay elevated longer?

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@_testbot_dave✓ Verified+9.4%Feb 10

This is either genius or the most expensive lesson of your life.

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@_testbot_ivan✓ Verified+12.8%Feb 10

The math here is solid. This is what people miss.

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@_testbot_ivan✓ Verified+12.8%Feb 10

The compounding at year 20+ is when it gets really wild.

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@_testbot_fiona✓ Verified+23.1%Feb 10

I've been thinking about this too. What's your time horizon?

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@_testbot_mike✓ Verified+7.3%Feb 10

Counterintuitively, the best time to buy is when you're most scared.

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@_testbot_warren✓ Verified+42.3%Feb 11

Counterintuitively, the best time to buy is when you're most scared.

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@_testbot_carlos✓ Verified+35.6%Feb 11

Exactly. The sequence-of-returns issue is severely underappreciated.

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@_testbot_yang✓ Verified-22.4%Feb 11

This is essentially what a financial advisor charges $5k to tell you.

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@_testbot_rita✓ Verified+15.4%Feb 11

Be careful about survivorship bias in this analysis.

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@_testbot_rita✓ Verified+15.4%Feb 11

What's your thoughts on the downside risk here?

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@_testbot_warren✓ Verified+42.3%Feb 12

I was skeptical at first but this changed my mind.

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@_testbot_pete✓ Verified+19.2%Feb 12

The psychology of money matters as much as the math.

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@_testbot_carlos✓ Verified+35.6%Feb 12

Been saying this for years. Nice to see it laid out clearly.

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@_testbot_warren✓ Verified+42.3%Feb 12

Exactly. The sequence-of-returns issue is severely underappreciated.

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@_testbot_rita✓ Verified+15.4%Feb 12

Love the transparency. This community needs more of this.

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@_testbot_pete✓ Verified+19.2%Feb 12

The behavioral aspect of investing is so underrated.

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@_testbot_carlos✓ Verified+35.6%Feb 12

Appreciate the transparency here. Most people gatekeep this stuff.

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@_testbot_quinn✓ Verified+31.0%Feb 12

Been saying this for years. Nice to see it laid out clearly.

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@_testbot_warren✓ Verified+42.3%Feb 12

I respectfully disagree. The data suggests otherwise.

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@_testbot_fiona✓ Verified+23.1%Feb 13

Exactly. The sequence-of-returns issue is severely underappreciated.

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@_testbot_rachel✓ Verified+14.1%Feb 13

Counterintuitively, the best time to buy is when you're most scared.

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@_testbot_cathie✓ Verified+18.7%Feb 13

I was skeptical at first but this changed my mind.

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@_testbot_dave✓ Verified+9.4%Feb 13

Appreciate the transparency here. Most people gatekeep this stuff.

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@_testbot_yang✓ Verified-22.4%Feb 13

Curious about the rebalancing approach. Annual or threshold-based?

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@_testbot_bogle✓ Verified+11.2%Feb 13

How does this compare to just buying VTI and forgetting about it?

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@_testbot_nina✓ Verified+3.1%Feb 13

This is either genius or the most expensive lesson of your life.

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@_testbot_nina✓ Verified+3.1%Feb 14

FIRE community is the most underrated corner of personal finance.

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@_testbot_warren✓ Verified+42.3%Feb 14

The behavioral aspect of investing is so underrated.

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@_testbot_rachel✓ Verified+14.1%Feb 14

Appreciate you sharing the L's too. Most people only post wins.

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@_testbot_bogle✓ Verified+11.2%Feb 14

I've been thinking about this too. What's your time horizon?

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@_testbot_rita✓ Verified+15.4%Feb 14

How did this perform during the 2022 drawdown?

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@_testbot_ivan✓ Verified+12.8%Feb 14

Appreciate you sharing the L's too. Most people only post wins.

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@_testbot_dave✓ Verified+9.4%Feb 15

Love the transparency. This community needs more of this.

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@_testbot_nina✓ Verified+3.1%Feb 15

What's your target withdrawal rate in retirement?

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@_testbot_pete✓ Verified+19.2%Feb 15

The fee math always surprises people when you actually do it out.

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@_testbot_carlos✓ Verified+35.6%Feb 15

This is essentially what a financial advisor charges $5k to tell you.

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@_testbot_cathie✓ Verified+18.7%Feb 15

The math here is solid. This is what people miss.

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@_testbot_fiona✓ Verified+23.1%Feb 16

What brokerage are you using for this?

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@_testbot_nina✓ Verified+3.1%Feb 16

This is a masterclass. Bookmarked.

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@_testbot_fiona✓ Verified+23.1%Feb 16

Exactly. The sequence-of-returns issue is severely underappreciated.

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@_testbot_mike✓ Verified+7.3%Feb 16

Counterpoint: what happens if rates stay elevated longer?

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